Shenzhen Investment (abbrev. “Shenzhen Inv.”) has signed a Debt-to-Equity Swap Agreement with controlling shareholder Shum Yip Group, converting RMB2.60 billion of shareholder loans into equity of its wholly-owned subsidiary Shum Yip Pengji Holdings.

Upon completion, Shum Yip Group will hold 35.64% of Shum Yip Pengji, while Shenzhen Inv.’s interest will fall from 100% to 64.36%. The subsidiary will remain consolidated into group financial statements.

Transaction structure • Swap amount: RMB2.60 billion (≈USD400 million).  – RMB571.47 million will raise registered capital.  – RMB2.03 billion will be credited to capital reserves. • Valuation basis: The capital increase represents 55.4% of the Target Group’s appraised equity value of RMB4.70 billion (valuation date: 30 Nov 2025). • Governance: Post-completion the subsidiary’s board will have seven directors—four nominated by Shenzhen Inv. and three by Shum Yip Group.

Regulatory classification The capital increase constitutes: 1) a “major transaction” under Listing Rule 14, as the highest applicable percentage ratio exceeds 25% but is below 75%; 2) a “connected transaction,” because Shum Yip Group already controls 63.19% of Shenzhen Inv.’s issued shares. Accordingly, the deal requires independent shareholders’ approval. A circular with further details is slated for dispatch on or before 22 May 2026.

Financial profile of Shum Yip Pengji • FY 2024 profit after tax: RMB0.70 billion • FY 2025 loss after tax: RMB0.87 billion • Net assets at 31 Dec 2025: RMB3.70 billion The unit develops residential and commercial projects in Guangdong, Hunan and Jiangsu, and owns investment properties including Shum Yip Chuangzhi Building and Shum Yip Time Mansion in Shenzhen.

Impact on Shenzhen Inv. Management expects no immediate profit or loss from the deemed disposal. Group indebtedness will fall, improving net asset value and lowering interest expenses.

Strategic rationale The board positions the swap as part of the company’s 15th Five-Year Plan to pivot from traditional development to an asset-light, cash-flow-oriented model. Reducing non-core development exposure and strengthening capital structure are cited as key benefits.

Completion is conditional on approvals from independent shareholders, regulatory bodies and other customary conditions by 30 September 2026 (or a mutually agreed later date). Shareholders are advised to exercise caution when dealing in the company’s securities until final approval is secured.